When is it time to get a new car?

Question

Is there a point then the trade-in value is maximized?

Answer 1

A vehicle is a depreciating asset. This means that is continues to loose value as it ages, until it becomes worth almost nothing. The greatest amount of depreciation (lost value) occurs when the vehicle is first purchased. When you take delivery of a new car, it becomes a used car! You loose several thousand dollars in value when you drive it off the dealers lot! You also loose value every year when the new model year starts because your car is now a model year older.

The deprecialtion becomes less each year. Your best move financially is to buy a late model, low mileage used car, rather than a brand new one! That way you do not have the initial loss of value. Drive the vehicle untill the cost of repairs becomes too high. If you are spending $1200 a year on repairs, and have a car that you can drive safely, you are only looking at $100 per month. Any car payment will be much higher than that!

Answer 2

This is not an easy question to answer. The first two years of any vehicle will be the largest percentage of depreciation when compared to the new vehicle price.

Trade value starts to drop dramatically at 60,000 miles, and cuts in half for many vehicles when they hit 100,000.

Some people say "wait until the first of the year to buy for rebates". This is terrible advise. While rebates are generally highest at the end of the model year, waiting until the next calender year to buy a new prior-year model will give you two years of depreciation at once. This will make your trade cycle longer, unless you are willing to make a large down payment the next go round.

When is right to trade vehicles depends on your lifestyle. Would you rather drive a car for ten years and have no payments for a long time, or would you arther make a payment to have a more stylish and up-to-date car? Do you drive only a few thousand miles a year or do you drive a lot of miles? Can you really afford to trade vehicles now?

These are all factors that you should take into account. I have customers who keep a vehicle less that a year and others who keep a vehicle ten years. When the best time to trade is will depend on your own preferences, needs, and budget, more than anything else.

A far as the average, the average person trades their vehicle after 37 months. Seven years ago, the average was 30 months.

Answer 3

Drive cars until they fall apart....10 years or even longer. Only lemmings who live by other people's opinions care about what car they drive.

Buying a car every few years is a waste of money you are better off putting that money in your retirement money or paying off your house. In both situations your money is still there unlike a car.

And to the person who posted under me the only time a car will give you problems after 5 years is if you don't do maintaince....and yes there are other things that need to be done besides oil changes and gas. If you are having problems with cars after five years you are the type of person I'm talking about.

Answer 4

On a very new car it always best to trade it in before you 3 years warranty is up so that the warranty has some value to the new owner. If it is older than 3 years then it will really depend on the popularity of the model, the more common the car the lower it's value. Use a car guide or consult ebay or a site similar to autotrader.co.uk and see what cars older than yours are fetching now.

Hope this helps.

Answer 5

I think you should go with the normal average car live that is 5 years. After those 5 years the car will start getting more problems, and its not that it won't before that, but this problems will cost you more money since it will important pieces of the car. I personally think you can get out more money by selling than trade-in but if your going for it, do it before the new cars come out, for example before the 2008 models come out. When I bought my used car in 2006 it cost $18k and I waited 2 months for the 2007 models to come out and after that inmedietelly it cost $2k less and that's when I took my chance and bough it,

Answer 6

Hi
Cars lose value at different rates. All lose most in year one (becaseu they go from 'new' to 'used.' It varies a lot after that. The thing to do is buy a car price guide from the newsagents and look at how much your car would be worth if it was 1,2,3 years older. If you see a big drop in value from one year to the next, then sell before that.
Matt

Answer 7

i dont believe there is a point when the tiv is maximized but the best time to buy a new car is at the beginning of the year bc thats when prices go down on new cars

Answer 8

1.)when you park your car on the curb, you get ticketed for littering
2.) when the salvation army won't accept your car as a donation
3.)you park your car with the keys in it, the next day a sign says "no thanks"

Answer 9

A car usually depreciates rapidly after the second year.

Answer 10

Never,aluminum engines and heads,rubber timing belts,plastic intakes, no thank you.